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China has what I like to call a “high-quality problem.” Only in the People’s Republic does economic growth of 8.9% represent a slump.

These kinds of numbers would be pure fantasy to Americans or Europeans. American real GDP growth is clocking in at less than 2%, and the eurozone already might be in recession. Even among other emerging markets, China’s growth rates look spectacular. India’s economy is expected to grow by just 6.8% this year, and Brazil’s growth rate isn’t much higher than that of the U.S. Turkey, one of the Sizemore Investment Letter’sfavorite investment destinations, is expected to see its economy chalk up a measly 2.9% growth, according to the IMF.

Still, to be fair, China’s growth of “only” 8.9% is the lowest in two-and-a-half years. And its rapidly deflating property bubble is worrisome.

It’s hard enough to get good data in an open, transparent market like the United States, but China is notoriously opaque. As such, we have to depend more than we’d like on anecdotal evidence, and the anecdotal evidence is not encouraging. In late 2011, it was reported that a real estate developer in the Chinese city of Wenzhou was offering a free BMW to anyone who bought an apartment. Though extreme, this was not an isolated case. Developers throughout the country are having to resort to the same kinds of tactics that American builders used in the early stages of the housing bust: giving away high-priced goodies to entice would-be buyers.

Still, it’s dangerous to draw too many conclusions from the woes of the Chinese property sector. It should be remembered that the current slump was actually planned. The Chinese government was uncomfortable with the level of speculation and moved quickly to let the air out of what was quickly becoming a bubble by tightening lending standards. This is a tough balancing act for government or central banks; you use too little force and you fail to stop the bubble, but if you use too much you can end up engineering a deep recession. With GDP growth of nearly 9%, China is clearly not in recession, though it remains to be seen if there are spillover effects that act as a further drag on growth.

China eventually will blow up. It is extremely difficult to transition from a hyper-growth emerging market to a slower-growth developed economy, and I have my doubts about China’s ability to make that transition smoothly. Still, it would appear to me that 2012 is the year that this will happen. Frankly, if the 2008-09 meltdown wasn’t enough to derail China, then it’s hard to see Europe’s current predicament doing it in 2012. Yes, Europe is China’s biggest export market and yes, Europe is in very bad shape. But 2008-09 was the worst financial crisis in 100 years, and China was able to keep on chugging along.

China benefited in 2008-09 from a massive stimulus and infrastructure program that is highly unlikely to be repeated. I get that. My point is not that China will or will not enjoy growth rates of 9%or 10%. My point is simply that China is not likely to suffer a hard landing this year.

In the meantime, more anecdotal evidence points to Chinese economic strength. In the last quarter of 2011, ex-Asia world oil demand fell by 700,000 barrels per day, but Asian oil demand — led by China — grew by 400,000 barrels per day. The same report that showed Chinese GDP rising by 8.9% also made a passing remark that 2011 was a milestone year for China; a majority of Chinese citizens now live in urban areas. Urbanization is critical to the continued rise of the Chinese middle class, which is in turn critical to the development of China’s domestic consumer economy. And speaking of the domestic consumer economy, the same report also mentioned that China’s retail sales grew by 18% in December; not too shabby for a country purportedly at risk of recession.

Bottom line: I believe the rumors of China’s impending doom have been greatly exaggerated. China should be a bright spot in 2012, and I continue to recommend American and European companies with exposure to China, particularly luxury goods companies like Daimler (PINK:DDAIF), Diageo (NYSE:DEO) and Sotheby’s (NYSE:BID).

Still, I might resist the urge to load up on Chinese stocks themselves. Again, looking at the anecdotal evidence, I see a few disturbing developments. The Associated Press reported that nearly half of Chinese citizens with investable assets of $15 million were considering leaving the country. In another report published by Financial Times, 60% of high-net-worth Chinese planned to emigrate. Many wealthy Chinese nationals also have taken to buying high-end luxury properties in the West as a means of transferring assets out of the country.

When the country’s elite want to leave with their money, that is a deeply troubling sign. It doesn’t mean a crash is coming anytime soon, but it does give credence to my belief that the best way to invest in China is to do it indirectly, through Western firms with a strong foothold in the country.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter, and the chief investment officer of investments firm Sizemore Capital Management. Sign up for a FREE copy of his new special report: “Top 5 Contrarian Stocks for 2012.”